Musk's Tesla-Twitter Cascade

… nice write-up in Washington Post on the risk to Tesla of Musk’s twitter adventure.

Tesla’s stock price plummets as Twitter deal hangs in the balance…

Musk has taken out extensive personal loans that are heavily tied to the value of Tesla’s stock. At times, he has put down as much as 50 percent of his Tesla shares as collateral to back them. As the company’s share price approaches $600, Musk enters dangerous territory with lenders — where they could seek some of his equity to ease their confidence in his ability to pay, according to analysts.

“The Street will start to speculate, given the stock’s performance, that it’s getting dangerously close to that area code and that’s putting more pressure on the stock,” said Dan Ives, analyst with Wedbush Securities. “Because it’s a cascade effect. The stock coming down 35 percent since the Twitter deal, that was never on the map.”

For a few years in the late 1990’s, DELL stock was 75% of my portfolio. But the remaining 25% was well-diversified and I could comfortably live on less than a 4% withdrawal from that.

I hope the Tesla bulls are employing some similar metric in their situation. You don’t want to invest any funds you can’t afford to lose completely.



It may be a “nice write-up” but it contains hardly any truth. Just vague statements about concerns. Classic fear-uncertainty-doubt (FUD) tactics that are par for the course in Tesla hit pieces, which are all that these particular writers produce. It’s a shame that WaPo publishes this kind of trash.

Musk has only a small portion of his Tesla shares as collateral for loans. The Twitter deal depends on him putting up only a small portion more, and even that may not be needed. Nothing has happened yet, and it may never happen. But, regardless, it won’t be because of the stock price of Tesla.

The share price of Tesla would have to go down at least another 40% before Musk had any margin issues, even if the Twitter deal goes through on the least favorable terms.

There’s nothing here of the slightest concern. Tesla, since the announcement of the possible Musk Twitter purchase has done nothing remarkable. It has followed the NASDAQ at about 2x, which is its usual multiplier.

What is a concern to some actual Tesla shareholders is Musk’s tweeting behavior, but that’s not what this worthless piece is about.



It’s a shame that WaPo publishes this kind of trash.

Jeff hates Elon?

The Captain
it’s nice to see Tesla haters wanting to protect others’ portfolios